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One of the key indicators that facilitate traders interpret candlestick charts are candlestick patterns. This can be accessible when establishing simple systems that will update you when a trend is emerging so that you can initiate a trade.
The open, high, low, close price of the stock, commodity or currency over a period of time is illustrated in the candlestick form. The period covered is generally user selectable.
5 minutes is probable for day traders but you might select 15 minutes in some situations. Longer periods may be chosen for longer term trades.
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The body of the candle points the difference between the open and close values. If it is white (or green/blue on a colored chart) the open is the lower boundary of the elliptical body and the price marked up during the period you are studying. A red (for colored charts) or black indicates the top boundary is the opening price, although the price diminished during that period.
In candles, vertical lines poking up from the top and down from the bottom are referred as wicks. he highest stage the price ever hit is the top of the upper wick division. The low is the bottom of the lower wick.
The advantage of this kind of analysis is that the trader can right away see whether prices rose or fell over the period. Bearish tendencies or rise in price are depicted by green or white candles while bullish temperament or fall in price would be illustrated by red or black candles.
The connection of open and close values to high and low values can be noted quickly. Then you may have an entirely definite candle without a wick.
This is known as the Marubozu pattern. In this situation the rates never went lower or higher than their opening and closing points.
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The opening was the high price or the closing was the lower price if the candle was red or black. If it is white or green, the opening rate was the low and the closing market price was the high.
A relatively even upward or downward trend is indicated by a long body. A reversal is designated by a long wick on the top or on the bottom.
For accurate trend identification a candlestick should be studied in conjunction with the others that preceded it. Then you can fabricate more complex candlestick patterns signifying the anticipated trends to come.
Notice: Currency trading can be dangerous, may result in considerable losses, and is not suited for every person.